"The company didn't give the farmers any choice, they never intended to improve our well being, they just put us in a debt circle, took away our independence and made us their slave forever. They try to monopolize everything, the seeds, the fertilizer, the marketing channel and even our life". Santi, a farmer who tried the Bt cotton in South Sulawesi.

The above statement sums up the results of Bt cotton planting in South Sulawesi, Indonesia. In 2001, Indonesia was the first Southeast Asian country to approve the commercial release of Monsanto's Bollgard Bt Cotton, although on a limited scale. But within two years, the venture was abandoned mainly due to social and economic failures, and later a corruption saga behind the release was revealed. The seeds have been sown, conflicts have been ignited, problems have been created, leaving behind questions about who should bear the burden of picking up the pieces.

This paper describes the process of the release of the Bollgard genetically modified cotton in 2001 until it was abandoned in 2003, the problems associated with it and analyses the issue of lack of proper governance in the release of GM crops.

Why Bt cotton?

Cotton is not an important crop in Indonesia due to ecological incompatibility. According to former minister of agriculture, Bungaran Saragih, cotton is planted only on 50 thousand hectares all over Indonesia (Media Indonesia on line, 9 February, 2005). Thus it was quite strange that the first GM crop to be released in Indonesia is cotton. Corn, on the other hand, is planted on about 4 million ha.

It may be that Monsanto wanted to test the waters for GM crops acceptance in Indonesia. Cotton was never the target in Indonesia; Monsanto wanted to continue with GM corn and soybean.

The Bt Cotton Failed Journey

Bollgard Bt cotton was officially approved in Indonesia through the Decree of the Agriculture Minister No. 107/Kpts/KB/430/2/2001 to be commercially planted on a limited scale, i.e in seven regencies of South Sulawesi for a period of one year only. The government intended to assess the performance of Bt cotton during one year before taking decisions on whether to allow futher commercialization. This decree was released after NGOs questioned the legality of field trials on farmers' lands, the involvement of farmers in the field trial and the sale of harvest and seeds before official release of the GM cotton. Thus the decree was seen as an effort to legitimize illegal practices.

Nongovernmental organizations (NGOs) protested against the above decision, based on the fact that no proper independent risk assessment had been conducted. The government released Bt cotton for commercial planting merely based on short term multilocation tests which involved mainly efficacy test rather than biosafety assessment. Several NGOs then formed the NGO Coalition on Biosafety and Food safety, and contested the decree in the State Administrative Court. They sued the Minister of Agriculture, but PT Monagro Kimia, the Indonesian subsidiary of Monsato requested to the judge to be named a defendant as well. Like wise the company sponsored cotton farmer association also asked to be the defendant. The NGOs ended up suing three parties. They lost the case, but natural and social developments told a different story.

The Bt cotton was officially approved in February 2001 and PT Monagro Kimia, the Indonesian subsidiary of Monsanto imported the seeds from South Africa soon after for the first planting season. This in itself was a little strange as the seeds used in the field trial was of Australian origin. Seeds were supplied through PT Branitha Sandini, a local South Sulawesi company, the subsidiary of PT Monagro Kimia. Problems began to emerge by June 2001, in the form of Spodoptera infestation, attacking leaves and young fruits (Kompas 23 June, 2001). One year later, it became clear that the economic promises of Bt cotton were not delivered. Farmers were promised a harvest of 2-3 tons per ha, and even up to 4 tons/ha. In reality, the average yield was 1.1 ton per ha; indeed 74% of the 4.364,20 ha planted with Bt cotton, produced less than one ton per ha. In fact some 522 ha experienced a total harvest failure (Data from 2001 planting season collected by the South Sulawesi Plantations Service). As a result, about 70% of the 4438 farmers involved in the Bt cotton project could not pay back their credit.

Despite the above problems, the government extended its approval of Bt cotton commercialization for another year. But more problems appeared in 2002. The growth of Bt cotton plants during the second planting season was not normal. At four to five months, each plant could only produce ten balls, while in 2001, there were 30 balls per plant. This was because the seeds given to the farmers were left over from the previous season, thus the viability was lower as the seed supplying company did not have proper seed storage facilities. (Kompas, June 5, 2002).

In addition, the price of Bt cotton seeds set by the company at Rp.40.000 per kg but was unilaterally raised during the second planting season to Rp.80.000,- per kg. The price of cotton (also to be sold to the company supplying the seeds PT Branitha Sandini) set at Rp.2600/kg during the first planting season was reduced to Rp.2200/kg, also unilaterally. As a result, farmers had to pay higher productions costs, but produced less harvest and were paid less for their produce. Some farmers refused to sell their cotton harvest at a lower price and simply burnt part of their harvest symbolically. Those who did not burn their harvest continued planting Bt cotton as a way to try to recoup the losses as they still had to pay back their debt to the seed company (Kompas 12 August 2002, Surapati, 2002). By this time there were already tensions between farmers who accepted the Bt cotton in the first place and those who refused to try planting Bt cotton.

In 2003 despite the renewal of the Bt cotton approval, PT Branitha Sandini decided to stop supplying seeds. They said that the outstanding credit not yet paid by farmers is creating an economic loss to them. Apparently, farmers declined to pay back the credit. Both farmers and the local government threatened to sue the company but never acted on it. The company closed down their office in South Sulawesi, leaving behind a range of problems. In late 2003, the government announced that it had stopped the bt cotton development programme and is now switching to locally developed non-GM cotton variety, the Kanesia 7.

The Bt cotton was planted in Indonesia on the assumption that if it works in other countries such as the US, Australia and South Africa, it will work in Indonesia. Yet, the local ecology is different, as the following indicates (Surapati, 2002):

• Bollgard Bt cotton is designed to resist Helicoverpa armigera, but the more serious cotton pest in South Sulawesi is Empoasca sp. The Bollgard is susceptible to both Empoasca and Sundapterix bigutula.
• The local dry climate was not taken into account and in 2001 especially, there was a drought in Indonesia. This caused the explosion of the Spodoptera pest which was not a significant pest in other cotton varieties, but became a serious problem for the Bollgard in South Sulawesi. As a result, instead of reducing the use of pesticide, farmers in fact had to use a different mix and larger amount of pesticides to control Spodoptera.
• The dry condition may have also perhaps reduced the efficacy of the Bt gene

The corruption saga

The story did not end when the Bt cotton program was dismantled by the government. In early 2004, US authorities began investigation on whether Monsanto engaged in improper business dealings in Indonesia. The main issue was whether a former outside consultant to Monsanto made an improper $50,000 payment in early 2002 to an Indonesian government official at the direction of a former Monsanto employee (Reuters March 22, 2004).

The allegation turned true when on 6 January 2005, Monsanto (USA) was fined US$ 1.5 million for bribing government officials in Indonesia to avoid a decree that demanded an environmental risk assessment for the Bt cotton Bollgard. The US Securities and Exchange Commission (SEC) charged Monsanto with illicit payments in violation with the Foreign Corruption Act (FCAP), with bribery including US$ 50,000 in cash to repeal an decree requiring an environmental risk assessment, falsifying books and invoices, and "questionable payments" such as for the purchase of land and the design and construction of a house in the name of the wife of a senior Ministry of Agriculture official. Such payments of approximately US$ 700,000 were made to at least 140 current and former Indonesian government officials and their family members from 1997 to 2002 (SEC 2005).

Monsanto has agreed to pay US$ 500,000 to settle the bribe charge and other related violations, and to pay US$1 million to the US Department of Justice, to adopt internal compliance measures including an having an independent compliance expert and to cooperate with continuing civil and criminal investigations (SEC 2005).

This was followed by investigations in Indonesia by the Corruption Eradication Commission (KPK). The commission questioned former and present Agriculture Ministers, Environment Ministers, employees at both ministries, Monsanto Indonesia representatives and PT Harvest, the international consultant company that was involved in lobbying the government to accept GM crops. This is a difficult process as the Indonesian authorities do not have the names of those involved in the corruption scandal.

The Agriculture Ministry, who conducted its own internal investigation said that the Monsanto case involved 45 people from the civil service as well as third party. It was not made clear, who the third party is. The only third party known is PT Harvest, whose director denied any role in the bribery case. But the employee who handled Monsanto account, Michael Villareal was no longer with Harvest but has been questioned as well by KPK (The Jakarta Post 14 January 2005; Suara Pembaruan 10 March 2005). No information has been forthcoming as who did the bribing and who took the bribe.

In the process, since Monsanto had reported the bribery case voluntarily, it may seem as if the company has gone "clean". But one needs to question the intent behind the corruption revelation and why only in Indonesia.

Not The End of the Story

The corruption saga has by no means ended the GM crop story in Indonesia. Monsanto had already conducted field trials for GM corn and soybean, as shown in Table 1.

Table 1. Status of GM Crops in Indonesia (External source)

Analyzed by Konphalindo based on : TTKHKP 2001, 2002, Herman (Balitbio) 2000, Inez Loeddin (LIPI) 2000, Kompas 24 September 2002; Trubus April 2003; NBF Report, December 2003

Note: * and ** : original test results have never been made public. It is not clear what criteria is used to arrive at the conclusion that the food produced from those GM crops are safe.

There are some issues related to this. First, farmers are already involved in the field trials much in the same as the Bt cotton case. That is, farmers were given subsidized seeds and fertilizers, told that the market is guaranteed (the company will buy the harvest) and also told that these are high yielding seeds without any explanation about genetic engineering or the impacts of GM seeds. Secondly, seeds are already being planted and there is no monitoring. Next, the locations of field trials are not made public and even government officials sometimes are not sure where they are. This means illegal GM seeds could actually have been distributed. Finally, Indonesia still have weak regulations to govern GM crops, including weak law enforcement and monitoring system.

It is reassuring however, that officials at the Ministry of agricultre had admitted wrong procedures for the release of Bt cotton. One of which is the fact that field trial had been conducted only for one planting season when it should have been for several planting seasons. Further, the Ministry will review all legislations and permits for GM crop release (Suara Pembaruan 10 March, 2005). It is not clear how these reforms would be undertaken.

Meanwhile there is still the issue of the fate of farmers. As said earlier, farmers do not have sufficient knowledge about GM seeds. In many cases, agricultural extension workers with company officials would visit farmers to introduce GM seeds as "high yielding variety" and promise them higher yields at lower costs. In the case of Bt cotton, farmers were promised that after three to four planting seasons, they would have enough money to go to Mecca for the Haj pilgrimage. Farmers were involved in the multilocation field trial (which is actually a violation of the regulation) and were provided with seeds, fertilizers and pesticides at a subsidized value. Thus the GM seed package seems attractive to them, although it is given as a loan package.

However, once farmers want to plant GM seed, again in the case of Bt cotton, they had to sign a contract not as an individual, but through the head of the farmers group. Yet the contract became legally binding for all members of a farmers group.The contract stipulates: (1) farmers must sell the cotton harvest to the seed supplying company that also supplies agrochemicals; (2) seeds can only be used for one planting season; (3) farmers must bear the risks of harvest failure by planting bollgard cotton again in the next planting season in order to pay back the loan; (4) farmers deemed to abandon their fields must let the fields become under the control of the farmers group. Most farmers do not understand such a contract and the government does not provide legal aid should something go wrong. In the Bt cotton case indeed there was harvest failure and farmers were not compensated. Yet, a similar pattern is being implemented in the multilocation field trial of RR soya (also produced by Monsanto) in Kediri, East Java.

The introduction of GM seeds inevitably leads to a social tension between farmers that accept and farmers that do not want to accept them. In many cases, the company selects and approaches the richer farmers because they can bear the risks better and are more influential. In the case of the Bt corn in the Philippines, for instance, the richer land-owning farmers are the ones that can afford the price of growing GM seeds.

In general, farmers in Indonesia have very low bargaining position. Their main problem is access to land and production tools, rising prices of production means, and decreasing prices of their harvest. In such a situation they accept anything that they think will make their life easier. With subsidies from companies, GM seeds seem to provide such an opportunity but they are not told of the long term impacts. Once they understand that GM seeds will increase their dependence upon companies, usually farmers would reject them. This is the experience of the Organic Farming Network, a coalition of organic farming groups and NGOs advocating for organic farming systems.

Finally statements from a facilitator and a farmer sum up the GM crop reality.

Totok (a farmer facilitator, Yogyakarta, Indonesia):

"These companies are seed traders; no trader would say his goods are bad. They say this is about science based farming but in reality they are just selling seeds that will take away farmers' rights over seeds and independence over crop management."

Suko (traditional rice breeder and organic farmer, Sukoharjo, Central Java, Indonesia):

GM crops are now patented, that means farmers will have to buy seeds all the time, although we can actually breed our own seeds. GM crops will displace our local seeds, it will increase the production price as they come in a package and farmers have to buy agrochemicals together with the seeds. This increases dependence of farmers on seeds from companies. It will erode the knowledge of farmers about breeding. Our experience in the past shows that company seeds and agrochemicals make our soil barren and in the long term the production cost becomes higher than the price of our harvest"